R.I.’s median house price rises 17 percent from year ago, but sales dip

However, many urban communities, including Providence, have been largely left out of the housing recovery, according to a May 8 report from the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley.

PROVIDENCE — The median price of a house sold in Rhode Island in April was $210,000, a 17-percent increase from April 2013, according to the Rhode Island Association of Realtors.

And while the number of houses sold in April fell by 5 percent, the number of houses available for sale increased by 2 percent, the association reported in statistics released Tuesday.

Low inventory has been a problem “for too long,” said association President Robert Martin.

The association, which tracks only Realtor-assisted sales, also reported that the condominium market had strong gains in April, with a 10-percent gain in median price, to $172,500, and a sales increase of 3 percent.

Lawrence Yun, chief economist for the National Association of Realtors, recently predicted that the median national home equity gain over three years is expected to be $40,000.

However, many urban communities, including Providence, have been largely left out of the housing recovery, according to a May 8 report from the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley.

In the report, titled “Underwater America: How the So-Called Housing Recovery is Bypassing Many American Communities,” Providence ranked 24th in the nation in a list of cities with the highest number of underwater homes. (Underwater means the amount of a home’s mortgage exceeds the home’s market value.)

The report said that 36 percent of homes in Providence are underwater, and home prices remain 40 percent below their peak in 2006.

In Providence’s 02909 zip code, which is 68 percent minority, 48 percent of the homes are underwater, and prices are 47 percent below the 2006 peak, the report added.

The Rhode Island Realtors’ association reported that April’s median house price in the affluent East Side of Providence was $460,000, while it was $115,000 in the rest of Providence.

Though median prices were up by more than 40 percent in both markets, compared with April 2013, foreclosures and short sales continued to play a significant role in the Providence market, accounting for 11 of the 29 sales in April, compared with zero of the 9 sales on the East Side.

Association statistics show that in 2006 the East Side median price was $502,000, while the median for Providence was $212,475.

So, in April 2014, non-East Side Providence’s median house price was about 54 percent of what it was in 2006, while the East Side’s median price was about 92 percent of its 2006 peak.

The Haas Institute report said many communities with significant minority populations continue to struggle with fallout from the housing crisis.

“There are geographic hot spots where the problem is particularly dire. Many of these hot spots are areas with a significant population of African American and Latino homeowners who were targets of abusive and reckless banking practices, including an epidemic of subprime loans with predatory features,” the report said.

“Banks, private mortgage companies, and mortgage brokers preyed on homeowners in low-income and minority areas. They did not just target low-income African American and Latino families; they also targeted middle-class African American and Latino families who lived in neighborhoods with high proportions of minority families.”

The report’s authors argued that market forces alone will not bring the recovery to severely impacted communities, and they called for government intervention to reduce mortgage principal.